Iran-EU Trade Plunges 75%

Germany, Italy and the Netherlands were Iran’s top three trading partners in the European bloc with bilateral exchanges standing at €1.09 billion, €658.04 million and €333.45 million respectively.

Iran’s trade with Cyprus (€4.41 million) and Bulgaria (€57.35 million) increased by 51.25% and 26.31% respectively year-on-year—the highest among EU states.

Trade with Greece (€30.37 million), Spain (€190.61 million), Luxembourg (€365,881), France (€269.17) and Sweden (€50.33 million) saw the sharpest declines of 97.28%, 91.37%, 88.54%, 87.7% and 81.77% respectively, Financial Tribune reported.

Eurostat is a directorate of the European Commission located in Luxembourg. Its main responsibilities are to provide statistical information to EU institutions and promote the harmonization of statistical methods across its member states and candidates for accession.

Data provided by organizations in different countries, which cooperate with Eurostat, are summarized under the concept of European Statistical System. 

Exports Decline 94.11%

Iran exported €476.99 million worth of commodities to EU during the eight-month period, indicating a 94.11% fall compared with the similar period of the previous year.

The main export destinations over the period were Germany (€132.85 million), Italy (€110.61 million), Spain (€48.05 million), Belgium (€27.68 million) and Romania (€27.05 million).

Iran’s exports to Latvia, Estonia and Bulgaria experienced the highest year-on-year growth rates of 446.24%, 172.04% and 9.61% respectively. 

This is while exports to France, Greece and Spain fell by 99.15%, 99.10% and 97.33% YOY respectively, which are the sharpest among EU member states.

The exported goods mainly included edible fruit and nuts; peel of citrus fruits or melons worth €84.52 million; iron and steel worth €80.97 million; plastics and articles thereof worth €80.27 million; coffee, tea, maté and spices worth €25.18 million; pharmaceutical products worth €24.67 million; carpets and other textile floor coverings worth €21.44 million; products of animal origin, not elsewhere specified or included worth €19.79 million; iron or steel products worth €19.26 million; lac, gums, resins and other vegetable saps and extracts worth €14.77 million; and nuclear reactors, boilers, machinery and mechanical appliances worth €11.6 million.

Imports Fall 51%

Imports from the EU dropped by 51.67% to stand at €2.99 billion during the eight months under review.

The top five exporters from the European bloc to Iran were Germany with €962.98 million, Italy with €547.43 million, the Netherlands with €321.8 million, France with €256.24 million and Belgium with €152.99 million worth of shipments to Iran.

Croatia with €6.86 million, Cyprus with €4.17 million, Bulgaria with €33.18 were EU countries whose exports to Iran saw the highest YOY increase (86.77%, 58.24% and 42.08% respectively).

Luxembourg with €327,313, Latvia with €776,824 and Sweden with €43.03 million experienced the sharpest YOY decline in exports to Iran (89.35%, 88.17% and 83.83% respectively).

The imports mainly included nuclear reactors, boilers, machinery and mechanical appliances; parts thereof worth €770.58 million; pharmaceutical products worth €441.97 million; optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof worth €373.4 million; cereals worth €154.94 million; electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles worth €137.93 million; organic chemicals worth €100.34 million; plastics and articles thereof worth €79.5 million; miscellaneous chemical products worth €74.34 million; oilseeds and oleaginous fruits; miscellaneous grains, seeds and fruit; industrial or medicinal plants; straw and fodder worth €65.72 million; essential oils and resinoids; perfumery, cosmetic or toilet preparations worth €60.56 million.

Other imported products included paper and paperboard; articles of paper pulp, of paper or of paperboard worth €47.37 million; tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other coloring matter; paints and varnishes; putty and other mastics; inks worth €43.38 million; manmade staple fibers worth €36.24 million; miscellaneous edible preparations worth €34.24 million; vehicles other than railroad or tramway rolling-stock, and parts and accessories thereof worth €32.56 million; tobacco and manufactured tobacco substitutes worth €32.2 million; articles of iron or steel worth €31.38 million; and mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes worth €28.9 million.

US Walkout From JCPOA

The steep decline in Iran's trade with Europe came after the US decided in 2018 to withdraw from the nuclear deal Iran signed with world powers in 2015 and reimpose sanctions against Iran.

The nuclear deal, better known as Joint Comprehensive Plan of Action, was reached between Iran and the five members of the UN Security Council as well as Germany. As per the terms of the agreement, years of international sanctions against Iran were lifted. In exchange, Iran agreed to limit the scope of its nuclear program.

Following the US withdrawal, according to The Brussels Times, the European Union and the other signatories want to pursue the implementation of JCPOA without entering into conflict with the United States.

As a result of the extra-territorial effects inherent in Washington’s sanctions, companies trading with Iran risk being excluded from accessing the American market.

Iran began in May to reduce its compliance with JCPOA in response to the United States' withdrawal and reimposition of sanctions and the other parties' failure to safeguard its economic interests under the agreement. 

It has demanded assurance for the sale of its oil, the country's main source of income, and "access to its revenues as completely ready for use and without any restriction", according to Deputy Foreign Minister Abbas Araqchi.

A compensating mechanism, named INSTEX, was conceived to bypass the impediment. It is based on an equalization between European importers and exporters and their Iranian counterparts. INSTEX is limited to the areas of health and food processing.

A company to operate the mechanism was set up in Paris.

Despite its creation some nine months ago, INSTEX is not yet operational due to complex technical issues and European companies’ fear of being targeted by hostile US sanctions.